Wealth-X survey debunks myths about Europe’s wealthy

By: Caroline Allen | 17 Jul 2012

Contrary to conventional wisdom that wealth in Europe is largely inherited, a survey from Singapore-based research firm Wealth-X indicates that a large and growing proportion of the wealth that resides in Europe is self-created.

Inherited wealth still inhabits an important space in the ultra high net worth (UHNW) population, the report added.

But the indications are that a certain part of those who inherit go on to create wealth for themselves. “These are potential indicators that the spirit of creativity, renewal and sheer effort is still very relevant for mature economies,” the report, which focused on Germany, France and Italy, noted.

The analysis into self-created, inherited, and both inherited and self-created categories may help to explain differences in attitudes towards investment, the survey found.

UHNWIs whose fortunes are self-created tend to have higher risk appetites, while UHNWIs whose fortunes stems from inheritance may be more focused on wealth protection.

Wealth-X also compared the 2011 general government net debt of the most vulnerable countries in the Eurozone with the combined wealth of UHNW populations of Germany, France and Italy to analyse the debt of individual countries as a fraction or multiple of the combined wealth of these populations.

Of particular interest, the report noted, is the fact that Italian UHNW combined wealth is only 10% of Italy’s 2011 General Government Net Debt. “This points to the intractable nature of its debt problems, and the potential impetus for wealth transfer out of the country to destinations that offer greater stability and opportunity.”

In France, there are an estimated 15 billionaires, who represent the top

0.4% of the UHNW population, and control close to 24% of the total fortune attributable to the ultra wealthy segment. On average, these billionaires are worth almost $8bn each.

There are 65 individuals worth at least $500m to $749m and 395 individuals worth $200m to $499m. The lowest tier of France’s UHNW group, represented by those worth $30m to $49m, is the largest group, making up 44% of the total UHNW population. They have a combined fortune of $70bn or almost 14% of the total wealth of France’s ultra wealthy population.